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Tuesday, October 21, 2008

This is an easy question, but I'd like to explore this evaluation a little further, possibly breaking some paradigms we may have.

It's easy to answer this question with how much money you make an hour, but what I want is to get you to think about your worth differently. Beginning with the average way of answering this question, let's evaluate. If you work a job 40 hours a week, and your boss pays you $28 an hour, you gross $1,120 a week, before taxes. That's a good amount, but are you really making $28 an hour? Should you not include the time it takes you to prepare for work, the time it takes you to get to and from work, and any other time you devote off of the clock? Adding this one aspect to the equation can drop your value per hour significantly. But wait, it doesn't stop there. Do you not have work expenses like the purchase of work-appropriate clothes, meals, office supplies, gas, ect.? Would this not lower your value per hour even more?

If you believe in multiple streams of income, then you believe that you can generate income at any time of the day, any day of the week. This is the mindset of the financially free. Incorporating this mindset into our original evaluation, we can no longer limit our time of productivity to 40 hours a week. A person that believes in multiple streams of income would need to evaluate their value per hour, based on a 168 hour work week. Remember, that if you believe in multiple streams of income, you trust that you can generate income at any time of the day. Going back to our original evaluation, making $28/hour at work, your true value per hour is more like $6.67/hour. Ponder that.

I think that it is important to remember that at every moment you can be generating cashflow. This doesn't mean that you should be thinking about generating income all the time, but simply that you have the opportunity to. Most people don't consider the possibility that they could be making money outside of their jobs or careers, while the financially free understand that there are opportunities all around us. Evaluating your true value per hour is just a simple test to relate your life to the law: "time is money".

Take the time to figure out your true value per hour. You'll be surprised at how quickly you can improve that figure.

1 comment:

Alex
said...

I think you are overreacting. Expenses are natural and it's called life. You drive to work, you buy lunch, etc. There's your salary before and after taxes, I can also agree with fitting some special work supplies into your formula, but for the most part I think you take it too far...